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How does migration policy affect the labor market?

Migration policy deals with issues of national and international mobility, such as demand and supply of workers, and what migration means for natives and migrants and for sending and receiving countries.

Immigrants initially earn less than natives;
the wage gap falls over time, but for many immigrant groups it never
closes

Immigrants contribute to the economic
development of the host country, but they earn less at entry and it takes
many years for them to achieve parity of income. For some immigrant groups,
the wage gap never closes. There is a wide variation across countries in the
entry wage gap and the speed of wage assimilation over time. Wage
assimilation is affected by year of entry, immigrant skill, ethnicity, and
gender. Policies that facilitate assimilation of immigrant workers provide
support for education, language, and employment. Such policies can also
reduce barriers to entry, encourage naturalization, and target selection of
immigrants.

Where STEM immigrants were educated strongly
influences their economic success and possibly their impact on
innovation

Canada, the US, and most Western countries are
looking to STEM (science, technology, engineering, and mathematics)
immigrants to boost innovation and economic growth. Canada in particular has
welcomed many STEM immigrants over the past quarter of a century. In the US,
there is an ongoing debate about whether the H–1B visa program is being used
effectively to attract more STEM immigrants. Interestingly, significant
differences exist between the two countries in earnings and likely the
innovation activity of highly educated immigrants, which highlights the
likely role of immigration policy in determining such outcomes.

With rising international migration, how
transferable are benefits, and how can transferability be increased?

The importance of benefit portability is
increasing in line with the growing number of migrants wishing to bring
acquired social rights from their host country back to their country of
residence. Failing to enable such portability risks impeding international
labor mobility or jeopardizing individuals’ ability to manage risk across
their life cycle. Various instruments may establish portability. But which
instrument works best and under what circumstances is not yet
well-explored.

Shifting the focus from immigrants’ initial
earnings to their propensity to invest in human capital

Immigrants who start with low earnings, such as
family-based immigrants, experience higher earnings growth than immigrants
who are recruited for specific jobs (employment-based immigrants). This
occurs because family-based immigrants with lower initial earnings invest in
human capital at higher rates than natives or employment-based immigrants.
Therefore, immigrants who start at low initial earnings invest in new human
capital that allows them to respond to the ever-changing needs of the host
country’s economy.

Concepts of citizenship are not universally
defined and need rethinking

Citizenship laws are changing in many countries.
Although cross-national differences in the laws regulating access to
citizenship are today not as large as they were several decades ago, they
are still very apparent. Globally, there is convergence over some
citizenship policy dimensions, but there is not a general convergence over
“liberal” or “restrictive” approaches to citizenship policy. A growing body
of research has put forward various comparative measures of citizenship and
migrant integration policies. However, selecting the “right” index is a
challenging task, and the underlying dynamics of citizenship laws are not
easy to interpret as they differ across countries.

Economic integration of refugees into their host
country is important and benefits both parties

For the first time since the Second World War,
the total number of refugees amounts to more than 50 million people. Only a
minority of these refugees seek asylum, and even fewer resettle in developed
countries. At the same time, politicians, the media, and the public are
worried about a lack of economic integration. Refugees start at a lower
employment and income level, but subsequently “catch up” to the level of
family unification migrants. However, both refugees and family migrants do
not “catch up” to the economic integration levels of labor migrants. A
faster integration process would significantly benefit refugees and their
new host countries.